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Trust-Funded Partnership Programs 101

December 16, 2017

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Trust-Funded Partnership Programs 101

December 16, 2017

 

What the –  trust-funded partnership programs??  A mouthful to be sure, and not very elegant, but it says what it is on its face, a good place to start.  Maybe someday we’ll reach for the acronym, but not as long we’re unpacking.

 

Trust fund + partnership + program =

a common form of structured partnership in international law.

 

That is the equation this blog is mostly about, a subject more fascinating than the label might suggest.  This formula represents a widely used modality in international development, and yet it remains underappreciated, both because it can be more challenging than necessary, and because it has more advantages than often realized.  

 

Trust-funded partnership programs are international platforms for combining efforts to make a difference.  They specialize in collectivizing – through commingled funds, shared decision making, centralized administrative support, coordinated implementation and lessons learned – usually under a brand name for visibility.  Partners create these mini-businesses by setting up a governing body, securing a trustee and secretariat (typically the same legal entity), and allocating roles and responsibilities, all under international law.  These roles and responsibilities include providing funds, managing funds, making decisions, supporting the partnership program and implementing activities.

 

Let’s do that again.  What gets collectivized?

 

  • Funds contributed by donors into one or more trust funds that are commingled pools

  • Decisions made by members of a governing body that has defined decision making authority

  • Fund management by a trustee that handles the trust funds on partnership-agreed terms

  • Central administration by a secretariat (or some set of dedicated staff) that supports governing body business and holds the partnership program together

  • A work plan (or equivalent) for implementation, although implementation is undertaken separately by various entities like the trustee, secretariat, grant recipients and others

  • Information and knowledge to support the partnership program’s advocacy and implementation

  • And other things besides, like results frameworks, remedies and more that can emanate from the above.

 

If done well, trust-funded partnership programs can be sustainable, effective and impactful.  Partners can leverage each other to become more than the sum of their parts in pursuing their mission.

 

What makes these trust-funded partnership programs special is the international law part.  It usually goes unstated, so not necessarily something the partners consciously choose.  However, by assigning an international organization, like one of the multilateral development banks (for example, the World Bank) or United Nations agency (for example, UNOPS), to be the supporting entity that provides the trustee and secretariat roles, partners position their trust-funded partnership program in international law by default.  And this is a good fit because most of the donors and most of the recipient beneficiaries are sovereign countries.  The partnership stays on an international level, and no country jurisdiction is favored.

 

Trust-funded partnership programs have an inherent hierarchy that follows the flow of funds.  From top to bottom, funds go from donors to trustee, and from trustee to recipients.  Each step occurs on the basis of a signed agreement, spelling out how the funds are to be handled and used, and these agreement terms flow down with the funds.  Typically recipients get funds as grants, meaning free money that does not get paid back (as long as used as prescribed).  In most trust-funded partnership programs, funds flow only one way. 

 

The partnership program connects to the trust fund by governing the fund flows in addition to the agreements.  This is a coupling of structure and decision making with agreements and fiduciary responsibilities.  Here is a process flow by way of example:

 

Donors contribute funds → Trustee receives the funds → Secretariat tees up decisions → Governing body makes decisions → Secretariat conveys decisions to Trustee → Trustee transfers funds in accordance with decisions → Recipient receives funds for specified purpose → Trustee monitors use of the funds → Recipient reports back on use of funds

 

To be sure, this is an oversimplified sketch.  In practice, there are any number of variations on the theme.  The secretariat may be part of the trustee, the governing body may be advisory with the trustee making decisions, the recipient may be a fiduciary and ongrant the funds, and many more permutations depending on the participants and circumstances.

 

So why do these end up more challenging than necessary?  Lots of reasons, many of which we’ll consider more fully down the road.  For example, partnership programs can stumble if they don’t get the way governance and agreements together frame fund flows and activities.  Or they can hit the shoals if they fail to lay things out in the beginning and discover differences of opinion later.  Or if things evolve and they want to make changes, but did not pre-position an easy way to amend.  Or many other ways trust-funded partnership programs can trip over themselves.

 

And why do they not realize many of their advantages?  Often for the same reasons.  The same blind spots that cause partnership programs to falter also cause them to miss opportunities to maximize sustainability, efficiency and impact. 

 

It is not rocket science, but it is not intuitive either.  Some perspective and experience can help.  Welcome to Stumpf on Structure!

 

 

 

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